STATE FARM LICENSE EXAMINATION TEST
2026 UPDATED QUESTIONS AND ANSWERS
GRADED A+
◉ Insuring Agreement
Answer: Section in the policy that describes what property is
covered and the perils the policy insures against.
◉ Jettison
Answer: A voluntary action to rid a ship of cargo to prevent further
damage or peril.
◉ Liberalization Clause
Answer: Condition found in property insurance contracts that
provides that if the insurer broadens coverage under a policy form
or endorsement without requiring an additional premium, then all
existing similar policies or endorsements will be construed to
contain the broadened coverage
◉ MCS-90
Answer: Endorsement attached to the truckers coverage form to
provide public liability coverage.
, ◉ Intervening Cause
Answer: An independent action that breaks the chain of causation
and sets in motion a new chain of events; when this occurs, it
became the new proximate cause.
◉ Legal Liability
Answer: Commercial property coverage form that covers the insured
for liability arising out of negligent damage to the property of others
while it is in the insured's care, custody, or control.
◉ Market Value
Answer: The amount property could be sold for at the time of of loss.
May be used to determine the amount of reimbursement for a loss.
◉ Messenger
Answer: In a crime policy, defined as an insured , partner, or
employee who has care and custody of insured property outside the
premises.
◉ Morale Hazard
Answer: Hazard created by an individual's tendency to contribute to
a loss through his own irresponsible actions or carelessness.
◉ Motor Truck Cargo Policy
2026 UPDATED QUESTIONS AND ANSWERS
GRADED A+
◉ Insuring Agreement
Answer: Section in the policy that describes what property is
covered and the perils the policy insures against.
◉ Jettison
Answer: A voluntary action to rid a ship of cargo to prevent further
damage or peril.
◉ Liberalization Clause
Answer: Condition found in property insurance contracts that
provides that if the insurer broadens coverage under a policy form
or endorsement without requiring an additional premium, then all
existing similar policies or endorsements will be construed to
contain the broadened coverage
◉ MCS-90
Answer: Endorsement attached to the truckers coverage form to
provide public liability coverage.
, ◉ Intervening Cause
Answer: An independent action that breaks the chain of causation
and sets in motion a new chain of events; when this occurs, it
became the new proximate cause.
◉ Legal Liability
Answer: Commercial property coverage form that covers the insured
for liability arising out of negligent damage to the property of others
while it is in the insured's care, custody, or control.
◉ Market Value
Answer: The amount property could be sold for at the time of of loss.
May be used to determine the amount of reimbursement for a loss.
◉ Messenger
Answer: In a crime policy, defined as an insured , partner, or
employee who has care and custody of insured property outside the
premises.
◉ Morale Hazard
Answer: Hazard created by an individual's tendency to contribute to
a loss through his own irresponsible actions or carelessness.
◉ Motor Truck Cargo Policy
